Xinyi bets on solar projects rather than markets – pv magazine international
Roller coaster actions, unpredictable interest rates and Covid’s continued chaos on global stock exchanges have apparently convinced the developer to invest in what he sees as a safer bet.
Chinese solar developer Xinyi Energy has put its money where it is on a compelling PV business case, and could invest up to HK $ 1.04 billion ($ 134 million) in new projects, rather than in the money markets.
The developer, ultimately controlled by solar panel glassmaker Xinyi Solar Holdings, released a first-half Hong Kong update yesterday, saying its directors haven’t found enough bond or financial market investments over the course of the year. of the first semester of the year. set to bet on more project acquisitions instead.
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Xinyi Energy explained that it still had around $ 1 billion in the bank after a stock issue in May 2019 that raised HK $ 3.76 billion net ($ 484 million). The company had spent HK $ 2.04 billion to help it acquire solar projects that year and used an additional HK $ 386 million ($ 49.6 million) for working capital and loans from refinancing. Through pv magazineBased on the rough calculation of, that would leave an unspent balance of around HK $ 1.33 billion (US $ 171 million), but Xinyi Energy estimated the figure to be around HK $ 294 million (US $ 37.8 million). US dollars) less.
Regardless, the developer announced in August that it could devote all of its cash to acquiring more projects and its latest update explains why, with Xinyi Energy reporting that the production capacity of 340 MW it bought last year had added HK $ 91 million ($ 11.7 million) to first-half yields of HK $ 1.11 billion ($ 143 million), up from 30% compared to HK $ 853 million (US $ 110 million) revenue posted in the first six months of last year.
This added to net profit to shareholders of HK $ 621 million ($ 79.9 million), up 42% year-over-year from $ 438 million in HK ($ 56.3 million).
Xinyi Energy acquired three solar farms with a total generating capacity of 250 MW from majority shareholder Xinyi Solar in the second quarter and will add three more (270 MW) in the last three months of the year. With an additional 80 MW added by an unrelated party in the first half of the year and Xinyi Energy planning 100 MW of grid-parity unsubsidized projects by the end of the year, the developer says it will add at least 700 MW of photovoltaic projects this year.
Unlike rival Chinese developers, who have dutifully stuck to the line of touting the ultimate benefits of the net-zero race of projects developed without grants, Xinyi Energy has taken a more pragmatic turn to abandoning grants, explaining that it will not insure any major discrepancies in its accounts due to the expectation of long delays in payments from Beijing.
The spending frenzy took its toll on the bottom line, however, with Xinyi Energy’s current bank borrowings dropping from HK $ 1.2 billion at the end of last year to HK $ 1.38 billion six months. later. Non-current borrowing more than tripled from HK $ 653 million to HK $ 2.12 billion, and cash flow increased from HK $ 1.36 billion at the end of December to HK $ 803 million.
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